by USA TODAY

by USA TODAY

NEW YORK - Stocks ended lower Wednesday after U.S. markets reopened following the Christmas holiday.

After release of a key housing report and disappointing holiday retail numbers, the Nasdaq ended down 0.75%, while the S&P 500 slid 0.5% and the Dow Jones industrial average drooped 0.2%.

Trading was quiet. European markets were still closed.

Major U.S. retailers fell following a glum report on U.S. holiday sales. Macy's and Urban Outfitters ended 1% and 2.7% lower, respectively. Sears Holdings lost 2.4%.

Coach, the luxury handbag maker, ended down sinking 5.9%.

The MasterCard Advisors SpendingPulse report found that sales of electronics, clothing, jewelry and home goods increased just 0.7% in the two months before Christmas compared with the same period last year.

That's well below the growth of 3% to 4% growth that analysts had expected and the worst performance since 2008, when spending shrank during the Great Recession. Last year sales climbed 4% to 5% during November and December, according to ShopperTrak.

The disappointing holiday sales figures outweighed the latest hopeful indicator on the U.S. housing market.

Home prices rose in most major U.S. cities in October compared with the same month a year ago, according to the latest Standard & Poor's/Case-Shiller national home price index. Sales rose at the same time the supply of available homes declined. The index increased 4.3%, the largest year-over-year jump in two and a half years, when a homebuyer tax credit temporarily boosted sales.

Traders were also watching to see if a budget agreement materializes in Washington. President Obama cut short his Christmas vacation in Hawaii and was returning to Washington later Wednesday to resume budget talks with Congressional Republicans.

The yield on the benchmark 10-year Treasury note edged down to 1.76% from 1.77% Monday. Trading was closed Tuesday for the Christmas holiday. Oil prices rose 2.7%. Benchmark crude gained $2.41 to $91.02 a barrel.

Japanese stocks hit a nine-month high as a pro-business government prepared to assume leadership. The Nikkei 225 index surged 1.5% to 10,230.36.

Japan's new prime minister, Shinzo Abe, has put pressure on the Bank of Japan to raise its inflation target. The goal is to extricate the country from two decades of deflation, or declining prices, which has deadened the world's third-largest economy.

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